Posts Tagged ‘ECNC’

CAI’sSenior HR Advisor and Government Relations Specialist George Ports explains the five major changes to North Carolina’s Unemployment System now that Governor Pat McCrory signed House Bill 4,UI Fund Solvency &Program Changes on February 19, 2013.

House Bill 4,UI Fund Solvency &Program Changes was drafted in efforts to address the $2.8 billion debt owed to the federal government and to improve efficiency at the North Carolina Division of Employment Security (DES).

Highlights of the five changes to North Carolina’s Unemployment System are:

Near elimination of “attached claims”

Elimination of “Substantial Fault”

Higher taxes at the state and federal levels

Elimination of most “good cause” reasons

Reductions in benefit amounts and duration

The effective date for most of these changes is July 1st, 2013 with the exception of new employer contribution rates, which will be effective January 1st, 2014

Let’s breakdown the three changes that are receiving most of the attention: reduction in benefit amounts, reduction in the duration of benefits and near elimination of “attached claims”

Reduction in benefit amounts

Currently the maximum weekly unemployment benefit is $535.00. This maximum benefit, under current law, is indexed annually based upon North Carolina’s average weekly insured wage (AWIW). So if the AWIW increases, so does the maximum weekly benefit. The new law’s purpose in reducing the weekly benefit to $350.00 is to bring North Carolina’s maximum weekly unemployment benefit in line with neighbor states that are as follows:

Florida –$275

Georgia–$330

South Carolina–$326

Tennessee–$275

Virginia–$378

In addition to the reduction in benefits, the maximum weekly will no longer be indexed annually; adjustments will require legislative action by the North Carolina General Assembly.

Reduction in duration of benefits

Under current North Carolina law, the maximum duration of benefits is 13 to 26 weeks based upon an individual’s work history. The new law provides that benefit duration is based upon a sliding scale determined by unemployment rates and an individual’s work history. An example of this sliding scale is as follows:

UI Rate is 5.5%: 12 weeks max. (5-12)

UI Rate is 9.5%: 20 weeks max. (13-20)

Each calendar year there will be two unemployment rates that will affect duration. One of the rates will be announced in January by the Bureau of Labor Statistics (BLS). The BLS, although a federal agency, announces the unemployment rate reported by North Carolina. This rate is actually the rate from the previous October. The second rate will be announced by the BLS July 1st (North Carolina’s rate from the previous April). In other words, if a claimant files in March the duration would be determined by the January rate. If a claimant files in September the duration of benefits would be determined by the rate announced in July.

Near Elimination of “attached claims”

Employers are currently able to file attached claims for employees to receive UI benefits during periods of work slowdowns or temporary layoffs. If the employer provides less than 60% of an employee’s regularly scheduled workweek, attached claims are filed and employees are not separated from the company.

The new law, for the most part, repeals the use of “attached claims” with some exceptions. The attached claims provision will be available if the employer has a positive credit balance and submits payment to cover cost of benefits. The payments are to be made at the time the claims are filed and will be credited to the employer’s account. The logic here is to ensure that the employer’s account does not go into a negative balance. This provision is limited to one time per employee per calendar year for a maximum of six weeks (Employers with a debit balance can utilize as above if they make an additional payment that would bring their account to at least zero).

CAI/ECNC (Employers Coalition for North Carolina) helped to fund an independent study conducted by a national organization specializing in unemployment and workers’ compensation system. Recommendations from the study were based on an analysis of North Carolina’s current debt/system issues and comparisons with other state systems. CAI/ECNC voiced concerns regarding the total repeal of the “attached claims” provision, which resulted in the limited exceptions included in the legislation as noted above. One of the main sponsors of House Bill 4 testified in a legislative committee that benefits paid out for “attached claims” accounted for nearly half of North Carolina’s $2.8 debt to the federal government.

This new law has pain points for both claimants and employers. However, the passage of the legislation was necessary to pay off the $2.8 billion unemployment debt owed to the federal government, bringing solvency back and repairing North Carolina’s broken Unemployment System.

The Employers Coalition of North Carolina (ECNC) is committed to improving the business climate of North Carolina through political advocacy at the legislative and administrative levels of government. For more information about ECNC, please visit www.ecnc.us.

For the first time since the late 1800’s, both chambers of the North Carolina General Assembly (NCGA) are controlled by the Republicans. This year’s NCGA session ended early, but legislators did reconvene briefly in July to deal with redistricting, vetoes and bills in conference. The NCGA’s new leadership tackled job creation, regulatory reform, tort reform and taxes with their legislative decisions.

To ensure your organization is informed on the recent legal outcomes, as well as stays compliant with the different changes NCGA has imposed, please review summaries of bills affecting workplace issues from the 2011 session:

H709—Protect and Put NC Back to Work:CAI and ECNC(Employers Coalition of North Carolina) have been focusing efforts on workers’ compensation reform since 2003, and this year were part of a large coalition of business advocacy groups who helped draft, lobby and negotiate the final version of the bill. New workers’ compensation claims will now be subject to a cap of 500 weeks on temporary total disability, “suitable employment” criteria has been revised to encourage return to work and employers will have reasonable access to medical information and treating physicians. The NCIC (North Carolina Industrial Commission) will be affected by dramatic changes, including legislative confirmation to gubernatorial appointments and requirements to comply with standards of judicial conduct and rulemaking procedures under the Administrative Procedures Act. To read this bill, go to http://j.mp/h709nc.Status: Passed the House and Senate with almost unanimous support and was signed by the Governor on June 24, 2011.

S532—ESC/Jobs Reform:CAI and ECNC have taken the lead on reforming North Carolina’s Employment Security Commission (ESC). We made sure that your voices were heard in Raleigh regarding the “head scratching” unemployment decisions that resulted in unwarranted charges to your unemployment accounts. CAI and ECNC worked with House and Senate leadership to design and draft this bill, which not only merges the ESC into the Department of Commerce but also makes important clarifications to unemployment insurance benefit eligibility language such as employee misconduct. To read this bill, go to http://j.mp/s532nc.Status: Passed the Senate and House but was vetoed by the Governor on June 30, 2011. The Senate overrode the veto on July 13, 2011 and the House overrode the veto on July 26, 2011.

S99—Reform UI Tax Structure/Expedite Analysis: This bill requires the Department of Commerce to hire an independent consultant for assistance in solving North Carolina’s unemployment insurance tax issue and the $2.5 billion owed to the federal government. Within 45 days of the completion of the analysis, the Department of Commerce will report to the Governor and the General Assembly how it intends to solve the problem. However, no specific date for starting the study is given. To read this bill, go to http://j.mp/s99nc.Status: Passed the Senate and the House, signed by the Governor and ratified on March 29, 2011.

H650—Amend Various Gun Laws/Castle Doctrine: This bill merges two bills: H63—Firearm in Locked Motor Vehicle and H650. H63 is no longer in play. The original bill had a section requiring all employers to allow employees to bring their guns to work if they were kept locked in the employee’s car trunk. ECNC opposed that version of the bill. An amendment on the House floor removed the “guns in trunks” section of the bill. To read this bill, go to http://j.mp/h650-nc.Status: The bill was passed by the House and the Senate and was signed by the Governor on June 23, 2011.

H36—Employers and Local Government Must Use E-Verify: This bill requires all public and private employers to use E-Verify when hiring new employees. The original bill required only private sector employers bidding on public contracts to use the system. It was expanded by the Senate to require all employers with a staff of 25 or more to use E-Verify, and now addresses concerns raised by the business community regarding penalties and processes. To read this bill, go to http://j.mp/h36-nc.Status: The bill was passed by the House and the Senate and was signed by the Governor on June 23, 2011.

H30—Allow Wage Garnishment to Satisfy Judgments: This bill allows a creditor to seek garnishment of a debtor’s wages once certain criteria have been met. There are specific guidelines regarding what can be garnished and how the garnishment can take place—a change from the original bill which allowed for greater latitude. The final version of the bill dramatically narrows what can be garnished. To read this bill, go to http://j.mp/h30-nc.Status: The bill has passed the House and was heard by Senate before being placed in the Senate Judiciary I Committee. It may be taken up again during the 2012 Short Session.

S386—Repeal G.S. 95-98 (Contracts between units of government and labor unions, trade unions or labor organizations concerning public employees declared to be illegal): For the past several sessions, this bill to allow collective bargaining for public employees has been filed in both chambers. There was no chance of it passing in this session. To read this bill, go to http://j.mp/s386nc.Status: Sent to Senate Rules Committee and never heard.

H223—Healthy Families & Workplace/Paid Sick Leave: This sick leave bill has been filed during several sessions but with the new House leadership, there was never even a hearing on the bill. To read this bill, go to http://j.mp/h223-nc.Status: Sent to House Commerce Committee and never heard.

ECNC is the only group in North Carolina that focuses exclusively on providing the business community with an avenue of public policy input on day-to-day employer-employee workplace issues. CAI and ECNC persistently spend long hours promoting bills at the NCGA on employers’ behalf. Support from CAI’s members and other proponents of their work have helped create the successes of workers’ comp and unemployment reform. Continued support from their advocates will help CAI and ECNC continue their public policy efforts to address and resolve critical workplace issues for employers of North Carolina.

For more information on any of the rulings above or to find out how CAI can help you with your compliance issues, please contact a member of CAI’s Advice and Counsel Team at 919-878-9222 or 336-668-7746.

Who We Are

CAI is a non-profit member based organization. We help more than 1,000 North Carolina member companies maximize employee engagement and minimize employer liability. We serve the greater Research Triangle, Piedmont, Triad and 65 central and eastern counties of North Carolina.